Overseas Filipino Workers

The BSP initiatives to improve the Overseas Filipinos’ remittance environment are geared towards the following:

Enhancing transparency and promoting competition in the remittance market. Studies on remittances underscore the importance of healthy competition among the remittance players to bring down transaction costs. To drive down remittance charges, remitters and beneficiaries should be fully aware of the costs and benefits of the different products and services available in the market. The BSP issued Circular No. 534 dated 26 June 2006, requiring banks and non-bank financial institutions to post remittance charges, classification of costs, and other relevant information for the benefit of remitters and beneficiaries. To facilitate access to bank websites, the BSP will serve as a portal* to all relevant pages of the banks on remittance services and products, locations of branches/centers as well as their corresponding service fees.

Improving access to financial services. Toward promoting efficient and speedy transfer of funds to beneficiaries in remote areas of the country, the BSP has:

a) granted foreign currency deposit unit (FCDU) license to rural banks/ ooperative banks to encourage the flow of foreign exchange into the banking system and provide OFs with an option to maintain foreign currency deposits (FCD) instead of immediately exchanging their remittance proceeds into pesos;

b) facilitated interconnection of major ATM networks to provide safer and convenient banking and also reduce transaction cost or lower service fees for all ATM-related transactions of over 10 million ATM cardholders, including OFWs and their beneficiaries;

c) approved alternative modes of remittances, e.g., Smart Padala, G-Cash and stored value cards to achieve lower transaction cost and faster delivery time for the remitters and the beneficiaries; and

d) issued Circular No. 564 on 11 April 2007 to standardize identification requirements of banks to customers while ensuring compliance with the Anti-Money Laundering Act.

Encouraging OFs and their families to increase savings and investment. The National Government (NG) and the BSP have agreed in principle to offer retail treasury bonds as an alternative investment instrument to overseas Filipinos (OFs). In undertaking this proposal, the NG would promote the culture of saving among OFs, prepare them for future reintegration into the Philippine economy, and raise additional funding for government requirements, including infrastructure development. The BSP has encouraged commercial banks to offer OFWs specialized investment products and services, e.g., insurance, pension and real estate, with direct payment schemes to ensure the security and added convenience of beneficiaries. The BSP has also approved the proposals of DBP and LBP to launch their hedging program and Long-Term Negotiable Certificates of Deposit for OFWs, respectively.

Promoting financial learning among overseas Filipinos and their beneficiaries. The BSP continues to undertake its advocacy through financial learning campaigns (or FLCs) that aim to promote a culture of savings among overseas Filipinos and their families and encourage the channeling of these savings into productive investments in financial instruments and business ventures. The FLCs are conducted using lectures and multimedia presentations focusing on topics such as the importance of remittances, financial planning, rewards and risks associated with various financial instruments, and ways to protect remittances and savings. Through the FLC, the BSP aims to encourage the productive uses of remittances, not only for consumption or spending for the basic needs, but also for savings in different forms of financial instruments and/or investments such as in small- and medium-sized enterprises or microfinance.